Full file at https://testbankuniv.eu/Advanced-Accounting-12th-Edition-Hoyle-Solutions-Manual Chapter 02 - Consolidation of Financial Information
25. (20 minutes) (Preparation of a consolidated balance sheet)* CASEY COMPANY AND CONSOLIDATED SUBSIDIARY KENNEDY Worksheet for a Consolidated Balance Sheet January 1, 2015 Cash Accounts receivable Inventory Investment in Kennedy
Casey 457,000 1,655,000 1,310,000 3,300,000
Kennedy 172,500 347,000 263,500 -0-
Buildings (net) Licensing agreements Goodwill Total assets
6,315,000 -0347,000 13,384,000
2,090,000 3,070,000 -05,943,000
Accounts payable Long-term debt Common stock Additional paid-in cap. Retained earnings Total liab. & equities
(394,000) (3,990,000) (3,000,000) -0(6,000,000) (13,384,000)
(393,000) (2,950,000) (1,000,000) (500,000) (1,100,000) (5,943,000)
Adjust. & Elim.
(A) 382,000 (A) 426,000
(S) 1,000,000 (S) 500,000 (S) 1,100,000 3,408,000
Consolidated 629,500 2,002,000 1,573,500 (S) 2,600,000 (A) 700,000 -08,787,000 (A) 108,000 2,962,000 773,000 16,727,000 (787,000) (6,940,000) (3,000,000) -0(6,000,000) 3,408,000 (16,727,000)
*Although this solution uses a worksheet to compute the consolidated amounts, the problem does not require it.
26. (50 Minutes) (Determine consolidated balances for a bargain purchase.) a. Marshall’s acquisition of Tucker represents a bargain purchase because the fair value of the net assets acquired exceeds the fair value of the consideration transferred as follows: Fair value of net assets acquired $515,000 Fair value of consideration transferred 400,000 Gain on bargain purchase $115,000 In a bargain purchase, the acquisition is recorded at the fair value of the net assets acquired instead of the fair value of the consideration transferred (an exception to the general rule). Prior to preparing a consolidation worksheet, Marshall records the three transactions that occurred to create the business combination. Investment in Tucker ............................................... 515,000 Long-term Liabilities ............................................................... 200,000 Common Stock (par value) ..................................................... 20,000 Additional Paid-In Capital ....................................................... 180,000 Gain on Bargain Purchase ..................................................... 115,000 (To record liabilities and stock issued for Tucker acquisition fair value)
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Full file at https://testbankuniv.eu/Advanced-Accounting-12th-Edition-Hoyle-Solutions-Manual